A growing number of economists worry that a recession could be ahead, but the job market has yet to suggest it.
Last week’s July employment report shows that the economy produced 164,000 jobs last month, and the unemployment rate remains near a record low of 3.7 percent. As in previous months, there were sizable job gains in professional and technical services, health care, social assistance, and financial activities.
At the same time, wages also continue to slowly rise. In July, average hourly earnings rose by another eight cents to $27.98, an increase of 3.2 percent over the last 12 months. In its analysis The Conference Board suggests that the latest report means the hiring pace should continue for a while.
“We should expect more of the same in the U.S. labor market: moderate employment growth, labor market tightening, intensifying recruiting and retention difficulties, and higher labor cost growth which will continue to draw more people into the labor force, the Board said in a statement.
One significant consequence of the report, the organization says, is that further Federal Reserve rate cuts may be less likely.
While the technology sector continued to produce jobs, an analysis by CompTIA, a technology industry association, shows the telecom industry lost 5,100 jobs last month. That reduced the net jobs gain for technology to 11,400.
"Despite the telecom losses and some softness in job posting data, it was a reasonably solid month for tech," said Tim Herbert, executive vice president for research and market intelligence at CompTIA. "Digital transformation is an ongoing process, where the mix of investment, skills requirements and business alignment are never static."
Boost to housing
The impact of the report may also be felt outside the job market. Holden Lewis, NerdWallet’s home expert, says the strong jobs report, coupled with lower mortgage rates, could mean the lagging housing market is about to see more would-be buyers pour in.
“But many will be disappointed with what they find,” Lewis said in an email to ConsumerAffairs. “More buyers often lead to more bidding wars for homes, and with mortgage rates remaining relatively steady since June, getting into a home won't be any easier now than a few months ago.”